Singapore Temasek, GIC can raise ICICI stakes-report

SINGAPORE, Nov 21 (Reuters) India will allow Singapore's state investment firms Temasek Holdings and the Government of Singapore Investment Corp to raise their stakes in ICICI Bank to 10 percent each, India's Trade Minister Kamal Nath was quoted as saying.

Nath told Dow Jones Newswires in an interview late on Tuesday that the state firms could also look into buying a 10 percent stake each in other Indian private banks.

''They have been allowed. We will count their holdings in ICICI bank as separate investments,'' Nath said.

ICICI Bank is India's second-largest lender.

Local and Indian media reports in June had quoted Indian officials as saying that Temasek and GIC will be treated as separate entities for the purpose of investments in Indian banks.

Temasek had a 7.62 percent stake in ICICI and GIC had 1.73 percent at the end of September, ICICI's Web site said.

In the past, India's central bank had raised objections about Singapore investments in the country because Indian banking regulations say no single foreign entity can hold more than 10 percent equity in an Indian bank.

India and Singapore signed an agreement in 2005 allowing for greater access to each other's markets, to liberalise financial services and create avenues for increasing foreign investment.